$ASML Holding NV(ASML)$ Q3 Earnings: Triple Beat, Sky-High Demand, but will the Supply Bottlenecks cap their 2027-28 growth?
ASML just dropped its Q3 2026 earnings, and the numbers were definitively on the upper side:
• Total Net Sales: €11.7 billion (near the very top of guidance)
• Gross Margin: A monster 57.5% (beating expectations due to a massive €3.3B in high-margin Installed Base Management upgrades)
• Net Income: €5.0 billion (€12.95 basic EPS)
The Twist: Supply Constraints for 2027–2028
While the beat was clean across the board, the potential issue to watch out closely, is management's commentary on visibility. Customer demand for AI-related infrastructure is so intense that ASML explicitly warned their planned supply for 2027 and 2028 will not fully meet customer demand. They are scrambling to figure out how to stretch capacity beyond the previously planned 30% increase for 2028. High-end tool demand is stretching out years ahead, with some customers even eyeing 2029 and 2030. This might look like a good news, but the market might twist it as a bad setup forward looking.
Why I'm watching ASML closely
After the recent turbulence and sliding momentum across the broader AI trade due to various market jitters, I'm analyzing ASML not because I am a share holder. I used to own it, accumulating steadily through 2024 and 2025 before taking my profits off the table in mid-2026 after its massive run-up.
I believe ASML earnings as well as $Taiwan Semiconductor Manufacturing(TSM)$ earnings right around the corner, tomorrow, are the most insightful data we can have on the downstream AI market. They can show us how the Semiconductor demands is going to be a few quarters and up to a few years down the road.
I would say, for now, all in all, ASML earnings is a positive input. Let’s see how the market reacts tonight and how TSM numbers and forecasts will come out tomorrow.
Modify on 2026-10-14 22:39
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